Addressing health inequalities in South Africa : policy insights and the role of improved efficiency

Doctoral Thesis


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University of Cape Town

This study attempts to assess the equity and technical efficiency aspects of the South African health system. It empirically assesses the status qua and trends in equity as it relates to child morbidity and mortality and self-reported illness and utilization of different service providers in adulthood. Furthermore, an assessment of the technical efficiency and productivity of a sample of public sector hospitals is conducted. This is meant to explore the size of potential efficiency gains that is tantamount to the injection of additional resources, which are highly needed for addressing inequities in a scenario where mobilization of additional resources from the public purse is seriously constrained as a result of poor economic performance, stringent fiscal policies and competing priorities, among other things. Secondary data are used in the analyses. These include data from the Living Standards and Development Survey (LSDS) of 1993, conducted jointly by the World Bank and the South African Labour and Development Research Unit at the University of Cape Town, and data from the October Household Survey (OHS) series (OHS 1995 and OHS 1998) that are conducted annually by Statistics South Africa. For the analysis of hospital efficiency, data are obtained from annual statistical publications of provincial health departments. The equity analysis is done using concentration indices (and curves). In the adult population, standardized concentration indices are computed to rule out a possible confounding effect of the demographic variables, age and gender. Furthermore, utilization of services is standardized for need as measured by self-reported acute or chronic illness. Additionally, to identify some factors, which may be associated with inequities in child health, probit models are estimated. Data envelopment analysis (DEA) and DEA-based Maimquist productivity index are used to examine the state of hospital technical efficiency and productivity respectively. With the limited data available a tobit regression is also run to identify factors influencing the technical efficiency of hospitals. Overall, the findings of this study indicate that the huge income-related inequalities in health and health care that existed prior to the change of the political system in 1994 have been reduced significantly in the years after the installation of the new government. Analyses of the LSDS 1993 indicate significant pro-rich inequities in all the dimensions of equity in health and health care utilization examined in this study. Under-five mortality and child malnutrition manifest pro-rich inequalities of high magnitude. In the adult population, as is seen in many other studies, pro-poor inequities are seen in self-reported acute illness. This paradoxical pro-poor finding is, however, changed to pro-rich inequalities in the OHS 1995 and 1998 data. Inequalities in under-five mortality in the OHS 1998 data that do not show when income is used as a measure of socio-economic status (SES) are prominently seen when SES is proxied by race and residential location. This implies that the apparent bridging of inequities seen when income is used as a measure of SES may not enable us to definitively assert the absence of socio-economic inequities in health. Utilization statistics from all data sets indicate pro-poor horizontal inequities in the use of primary and other public health facilities, implying an appropriate targeting of public sector health care resources. The data clearly show that considerable health and health system inequities remain in South Africa. In order to rapidly address these inequities, additional resources are required to improve health and other health-promoting services in currently under-served areas and for specific disadvantaged groups. However, given the macro-economic context, the allocation of additional resources to the health sector is unlikely. The hospital sector, which absorbs the lion's share of the public health resources, seems to be plagued by high degrees of technical inefficiency. With the prevailing high levels of technical inefficiency and the adverse economic realities of the country, it would be difficult to mobilize additional resources needed for addressing existing inequities. Hence it is of paramount importance to address the existing technical inefficiencies in the hospital sector. Finally the study recommends that to address the inequities that besiege the country's health system, policies that transcend the health sector are needed and that there is an urgent need to rectify existing inefficiencies.

Bibliography leaves 230-248.